ATXP6 UK
Syllabus A5. Stamp Taxes A5c/d. Exemptions and Reliefs

A5ci/ii. Stamp taxes - exemptions and reliefs

Syllabus A5ci/ii)

Identify transfers involving no consideration.

Advise on group transactions.

Stamp taxes - exemptions and reliefs

The main exemptions relate to transfers where no consideration has been given.

  1. Gifts at no consideration

  2. Transfers of assets between 75% group companies

  3. Divorce arrangements

  4. Variation of wills

  5. Changes in trustees

  6. Takeovers, reconstructions or amalgamations

  7. On the purchase of government stocks

  8. On the purchase of company loan stock

  9. On the purchase of unit trusts

Transactions between companies

Sales of assets between companies in the same group are exempt from SDLT and stamp duty if:

-  One company is the beneficial owner of at least 75% of the issued share capital in one or more other companies.

Either of the companies can be non- UK resident i.e foreign parent or party to the transaction. 

When the purchasing company leaves the group within 3 years of the property transfer, the SDLT exemption is withdrawn and SDLT becomes payable.

Illustration

Greg received 100,000 of £1 ordinary shares in an unquoted company Able Ltd as a gift from his father when they were worth £60,000.

How much stamp duty is payable?

  • Solution

    This is a gift of unquoted shares, there is no stamp duty payable on gifts.

Illustration

White Ltd. and Black Ltd. are members of a 75% group.

Black Ltd transfers an office building to White Ltd on 1 December 2018 when the market value is £310,000

How much stamp duty is payable?

  • Solution

    Transfer of building between companies in the same 75% group are exempt for stamp duty, therefore there is £Nil payable.